Given the dynamic nature of freeway traffic, this study proposed two stochastic model approaches, Hidden Markov Model (HMM) and One-Step Stochastic Model, for short-term traffic prediction during peak periods. The HMM approach defines traffic states in a two dimensional space using both first and second order statistics of traffic parameters. For a sequence of traffic speed observations, the HMMs estimated the most likely corresponding traffic states sequence. The one-step stochastic model uses traffic speed as the traffic condition indicator. The cumulative negative/positive transition...